AT&T must pay $700,000 in data-plan settlement

NEW YORK -- AT&T agreed to pay the federal government $700,000 and offer refunds to customers for mistakenly forcing some smartphone users into monthly data plans.

In late 2009, AT&T began to require new smartphone customers to subscribe to monthly data plans. Existing subscribers with pay-per-use plans or no plan at all had to get a monthly plan when they upgraded to a new smartphone.

The requirement wasn't supposed to apply when subscribers replaced a lost or broken phone through an insurance program or warranty, or if they moved to a different AT&T service area. But a computer error moved those customers into monthly plans anyway.

AT&T now must offer to restore the older plans and give refunds, which the Federal Communications Commission said could be up to $30 a month.

AT&T said that the issue affected a small number of customers and that those who contacted AT&T had already been given refunds. Tuesday's agreement with the FCC requires the Dallas company to post notices on consumers' bills and offer them a chance to return to a pay-per-use plan or drop data use entirely.